A Different Look At Pms

Have you thought about buying the SDS sept 20 calls for 66 cents and the sept 19 puts for 60 cents. If the SDS goes upward, you ride the call side, and soon recover the cost of the put, but if you then cash in the call, you still have the put in case it crashes down to below current price, or visa versa.

The thing which could kill you is if the SDS stayed almost exactly where it is until 3rd week in sept and not go either direction, not above 21 or under 18. I think it would be unusual for it to do that, but options are a gamble.IMO.

Good idea, I do like options...I just wish they didn't expire. I did make a mistake getting into that position at that time, but the trade is not over yet. SDS may be seeing a big rebound early next week if the US gets a credit down grade. I'm down but not out...yet.

So, you think I should buy 600,000 burritos?

BTW... cash is NOT an investment. It IS a temporary holding pen for my financial resources. Note the word "temporary".

It will be interesting to see how fast the pigs can eat if the US defaults. I don't know if they will stop eating, pig-out, or puke.

Either way there will be some poop.

Last time interest rates were this low the fed started raising interest rates by 1/4% every fed meeting. The stock market went down every time interest was raised. The only claim Bernanke can make about any success throughout this debacle is the stock market. If the market starts to drop again erasing any retirement money that shareholders have regained will go right down the toilet and his last card will have been played. Aside from the stock market, every measurable gauge of recovery in this economy is negative to terrible. It's a good thing that gold is not considered a threat to the fed. Those of us putting false hopes in the "tradition" of gold as a hedge may sneak by unnoticed and succeed where all other strategies wallow in the mire. I'll take my chances with deflation for awhile anyhow. It won't appear overnight and precious metals will remain easy to liquidate until very near the weary end.

Could PM crash and burn with everything else in deflationary times? Yup. Even if they do, however, remember that they are a store of value, not necessarily a profit maker. If a silver quarter continues to buy at least a gallon of gas, it's done its job.